1. EPAct 2005
The Energy Efficient Commercial Buildings Tax Deduction
A Detailed Explanation And
What It Means for You

2. EPAct 2005
What is EPAct 2005?
• The Energy Policy Act of 2005, formally known as
EPAct 2005, provides building owners a tax
deduction based on the installation of equipment
that generates the efficient use of energy.
• The Energy Efficient Commercial Building Deduction
provides owners the ability to deduct up to $.60/sq.
ft. off their federal taxes in the year the lighting
systems are placed in service, as long as the lighting
exceeds the energy code requirements called out in
ASHRAE/IES Standard 90.1-2001.
• Lumena recently signed an agreement with a local
Energy Management Partner who is Certified to
provide EPAct Tax incentive Certificates and would be
happy to bring them in for further detail regarding
the EPAct program.
The challenge is to reverse the widening gap between our growing need for energy and what can be supplied from sustainable sources.

3. EPAct 2005
Why is EPAct 2005 important?
• Long-range and far reaching energy
policy
• Encourages energy conservation
– Renewable Resources
– Energy-savings innovations
– Higher-efficiency products
• Regulates electrical motor and
equipment performance
– Creates minimum efficiency
standards
– Incentives and research dollars
The challenge is to reverse the widening gap between our growing need for energy and what can be supplied from sustainable sources.

4. EPAct 2005
Energy Efficient Commercial Buildings Tax Deduction
• Provides accelerated tax deduction
incentives for energy efficiency
improvements completed in tax
years 2006-2008
– Originally scheduled to expire on
December 31, 2007.
– Extended one additional year
through December 31, 2008.*
• Use of this tax deduction can
generally provide discounts of
between 20%-25% overall.
*HR 6111: Signed by President George W. bush on December 20, 2008, extended tax benefits for one additional year, through 2008..

5. EPAct 2005
Overview of Lighting Benefits of the Commercial Building Deduction
• Building owners can reduce cost and improve their competitiveness/profitability
through lighting upgrades.
• Lighting upgrades will create new demand for higher end products and large
capital investment projects.
• Based on estimates from the Department of Energy, lighting represents 40% of the
electrical consumption in commercial buildings, equal to HVAC but higher than all
other equipment combined.
• Lighting is characterized as the easiest upgrade to an electrical system with
paybacks generating a 45% ROI within 2.2 years.*
• The Commercial Building Tax Deduction is just that…a direct dollar-for-dollar
reduction in taxes paid to the government the year the system is put in place.
*Based on Estimated Savings from Studies conducted on approved projects. Please note this is an estimate only.

6. EPAct 2005
How to Claim the Deduction
• Certification: IRS Notice 2006-52
– Advance notice: Interim guidance for taxpayers to certify that their
energy-efficient commercial buildings qualify for the deduction
provided by Internal Revenue Code (IRC) section 179D, as added by
the Energy Policy Act of 2005.
• Taxpayer must obtain a certification letter.
• The certification letter must be provided by a qualified third-party
inspector.
Forms available for download at www.irs.gov or contact your tax preparer directly.

7. EPAct 2005
Providing Certification
• A statement that the amount of such reduction has been determined
under the rules of IRS Notice 2006-52.
– The IRS does not require the actual amount of the deduction to be included in
the certificate.
– In general, the amount of the deduction is equal to the lesser of:
• (1) the capitalized cost incurred with respect to the energy efficient property and
• (2) per-square foot allowance.
– “Capitalized cost” is a tax term that the tax preparer should be able to
determine.
Forms available for download at www.irs.gov or contact your tax preparer directly.